Basic functions of economic theory

Using the methods considered, economic theory fulfills its main functions-cognitive, methodological, practical. The cognitive function of economic theory consists in the study, the study of objective reality, in this case - the economic life of society at a certain stage of it, in the cognition and characterization of the laws of the functioning of economic systems, causes and conditions their origin and development. Being fundamental spiders, economic theories are the methodological basis for all applied economic sciences, such as the economy of an industrial enterprise, the economy of agriculture, financial management, logistics, etc. This manifests the methodological function of economic theories. Practical function economic theories perform in interaction with economic policy. When they receive a social order, they formulate and disclose the essence of the economic problems facing the country, industry, firm, show the ways and necessary resources to overcome them, and thus serve as a theoretical basis for economic policy.

Economic laws - are stable, significant, constantly recurring links, interconnections and interdependencies of the phenomena and processes of economic life. They act only where there is human activity.

In addition to these laws, legal laws are normative acts adopted by referendum (popular vote) or by the highest representative body of state power (parliament) in a special procedural order , regulating the most important aspects of social relations and having the highest legal force.

Economic theory only considers economic laws.

Economic laws are divided into general and specific.

General economic laws - are laws that apply in all or several ways of production.

Specific economic laws are laws that operate within a single mode of production.

Economic laws, like the laws of nature, have an objective character, i.e. act independently of the will and consciousness of people. If the objective nature of the laws of nature manifests itself more clearly (the day is replaced at night, winter-spring, etc.), then the objectivity of economic laws, the depth of their manifestation is hidden from the human eye. There are two forms of realization of economic laws: spontaneous and conscious. A conscious form of implementing economic laws provides for a system of consciously developed by society levers to implement economic policies, both private business and the state.

From economic laws, it is necessary to distinguish economic categories which represent the most general concepts of phenomena and processes of economic life, reflecting their essential aspects. Each economic category - is a scientific concept that abstractly characterizes the essence of an economic phenomenon. These include: goods, money, value, price, property, demand, supply, finance, credit, etc.

There is a close relationship between economic laws and economic categories. Economic categories are the basis for reflecting the stable and strong cause-effect relationships and dependencies that make up the content of objective economic laws.

Science exists where there are patterns that can be identified, studied and predicted. This applies to any science, including economics. All scientific research includes a consistent system of three stages: living contemplation-abstract thinking-practice, where there is a clear formulation of hypotheses, their consequences, and a comparison of the latter with observational data. The theory is accepted, it is consistent with experience, with facts. If it is not comparable to the facts of reality, it is not of scientific interest. Submission to the facts of reality is the rule that prevails in any scientific discipline.

Many modern economists focus on the problems of effective organization of the economy, when the resources of the society become more and more limited and rare. In this connection, economic theory is defined as the science of choice in conditions of limited resources. There are definitions of economic theory as a science of wealth, about economic relations and economic laws. It is defined as the science of the types of activity associated with money transactions. Some economists consider the analysis of the market economy the subject of economic theory. Economic theory is also defined as the science of effective use of scarce resources.

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Most often, the subject of economic theory is defined in two aspects. First, as a study of human behavior in the production, distribution of material goods and services in the world of scarce resources and, secondly, as the effective use or management of limited production resources, whose goal is to achieve the maximum satisfaction of the material needs of man.

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That is, the subject of economic theory is the system of production relations in unity with wealth and limited resources, their effective use. This science studies the behavior of a person - both as a producer and as a consumer.

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